Beats Electronics ends partnership with Monster

Beats Electronics, the audio equipment brand founded by Dr Dre and Interscope Geffen chairman Jimmy Iovine, has announced an end to its partnership with Monster Cable Products.

Monster has manufactured the Beats headphones under exclusive licence since they were launched in 2009.

The partnership has so far proved hugely lucrative, helping Monster - the producer of audio and video cabling products - to take 53% of the $1bn annual US headphone market, according to the NPD group. Since those figures were released, NPD estimates that the market has grown by 79% to $2 billion at the end of 2011.

However, the partnership with Beats has now come to an end, with reports suggesting that the two sides have fallen out over financial terms.

Bloomberg cites people close to the situation as saying that the two firms have squabbled over who "deserves the most credit for the line's success", while Beats has grown dissatisfied with its share of the revenue.

Monster manufacturers and helps designs the headphones, and even claims that it originally dissuaded Iovine and Dre from making hi-fi speakers, instead urging them to focus on the headphones market.

However, the two Beats founders claim that it was their aligning the Beats headphones with celebrities that made the products a global success.

Lady GaGa and P Diddy have both designed special Beats headphones, while Nicole Kidman, US basketball star Kobe Bryant and even the late Apple founder Steve Jobs have been pictured wearing them.

Ben Arnold, director of industry analysis for NPD, notes: "Now a big part of what you're paying for is the brand and fashion."

Following the split, Beats will retain the rights to the bass-heavy sound technology, the circular headphone can design and the brand.

Monster has already laid the foundations for going forward without Beats, including a range of Monster-branded headphones targeted at athletes, women, business professionals and anyone who has not yet been persuaded to shell out for costly headphones.

The firm has already launched a $200 pair of in-ear headphones bearing the name of 1970s soul act Earth, Wind & Fire, and in all it has eight new lines in 50 different styles.

"We hope people will recognize what we've done in terms of sound with the Beats products," Monster chief executive Noel Lee told Bloomberg.

He added: "We're competing with ourselves. We can be the Apple of the headphones space, with or without Beats."